Statistical aberration or trend? The office vacancy rate in San Francisco increase for the first time in five years, ticking up 20 basis points to 5.7 percent in Q2 2015. A confluence of traditional tenants giving up space, new construction deliveries and sublease space additions caused the increase. In the near term, very low vacancy and limited available space is likely to result in less consistent statistical movements or aberrations contingent on the timing of spaces newly marketed, vacated or leased.
- Average asking rates have increased every quarter since Q2 2010 and are now 122% higher, including a 3.2% rise over last quarter to $67.99
- Total vacancy rose by 20 basis points (bps) to 5.7%, as a result of traditional tenants giving up space and new sublease space additions
- These vacant spaces lowered net absorption to 144,316 sq. ft. for the quarter, bringing the year-to-date total to 780,083 sq. ft.
- Looking ahead , the 1.5 million sq. ft. of new construction deliveries to come in 2015 will do little to rebalance the market, as 93% is pre-leased